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Several years ago, car donation services proliferated, and skepticism about many of these outfits grew – and was somewhat warranted. Using these services, you would donate a car and could claim a deduction for the fair-market value of the car. As a donor, you were responsible for determining that value. The car would be picked-up or towed and would most often be sold by a car processor on a lot or through auctions, and most charities would pay the processor for these services. The proceeds from the sale that remained after processing costs (often very little) would then support the charity's cause. Thanks to an IRS study and new guidelines, car donations are now more regulated, and it is easier for donors to determine the market value of their car, and to find out how much of that will benefit the charity to which they are donating. Therefore, if you follow general guidelines and just do a little research, you can rest assured that your car donation is benefiting your cause, and will be tax deductible at a fair rate.